Some random thoughts from Tim Dyson, the CEO of Next Fifteen. Next Fifteen is the parent company of Silicon Valley's most powerful technology PR firms: Bite Communications, OutCast Communications and Text 100. They're also parent to some of Europe's hot consumer PR and Research agencies such as Lexis and RedShift.

Tuesday, April 28, 2009

WPP and Omicom post poor PR results for Q1 - why?

The two largest marketing services companies in the world, Omnicom and WPP, posted poor results this week for their first quarter activities. Both saw some significant declines in revenues and both pointed to weakness in their PR businesses. In normal times I'd take some pleasure in such results but in these times I don't. I'd prefer to see an industry that is proving resilient in this economy. Of course you could argue that the drop in PR sales is to be expected given the overall slump in the economy. You could also argue that PR is doing relatively well. Unfortunately in both cases, they made the opposite point - namely that PR was actually doing worse than some other disciplines such as advertising. This really makes me scratch my head. When marketing budgets are tight it doesn't make sense to spend on advertising versus PR. Every piece of data I've seen says PR is more cost effective than advertising. So why are some companies doing this? Here are the reasons I can think of:

1. Ad agencies are doing a better job of showing their digital credentials2. Ad agencies are doing a better job of using metrics to show the effectiveness of their campaigns3. Ad spend may have been committed in Q1 and therefore harder to cut than discretionary PR projects4. Some businesses may have already cut advertising out of their mix, thus leaving PR as the only real choice5. Of course it could also say something about their PR agencies versus their ad firms

Put another way I wonder whether the Q2 sales of these groups will be more revealing in terms of real trends in PR versus advertising. I guess we'll see.

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About Me

Tim is CEO of Next Fifteen, a publicly traded group of PR businesses that has over 800 consultants worldwide. He joined the Company in 1984 and became its global CEO in 1992. As one of the early pioneers of tech PR, he has worked on major corporate and product campaigns with such companies as Microsoft, IBM, Sun and Intel. Tim came out from London to set up the Group's first US business in 1995 in Seattle and is now based in Palo Alto. Outside Next Fifteen, Tim is also on the advisory boards of several technology start ups.